Archives For Negotiating

How to Win the Negotiation

Here’s a great exercise – a Lesson on Winning

Will I win the negotiation? I wrote an entire chapter on this in my most recent book, From Vendor to Adviser. I don’t know if I’ll win this one, but I’m still hopeful.

Most of us negotiate everyday, but most of the people I work with have little experience in winning. I hear people getting angry, upset, frustrated, etc. None of these are winning tactics.

This morning I am in my weekly Monday Morning Kickoff Meeting. I start the week, every week, just like this. I look at metrics, my business plan, top accounts, upcoming events, and my Quarterly goals. I’m planning for my week.

Part of my Monday ritual is to check over my banking transactions, reconciling and looking for anything out of the ordinary. I took my Mastery Group to the Chinese Restaurant last weekend during a business planning and strategy weekend and they double charged me…but the manager also informed me of the mistake right after dinner asking me to make sure he didn’t double charge. So I know that will get cleared up as soon as my office manager puts a call into them.

That’s When Things Fell Apart

But then there’s this service charge on my bank account that should not be there. By having a business account linked to a Merchant account at my bank, that charge should not be there. So I called the bank, and that’s where my morning started going downhill. I quickly reminded myself, this is a negotiation – don’t get upset, work the process.

My 19 year old son is right beside me working on his business. But I can tell he’s listening in by the smirk on his face. He’s wondering if his dad will win this one…

The bank people were very nice. I quickly got them to agree that they told me I would not have this service charge. But it turns out the person who sold me this package was wrong. What’s the solution? The bank will credit my account, make a note on the account, and then send me over to Bank of America Merchant Services to cancel that service.

It is amazing how friendly the Bank of America rep is compared to Bank of America Merchant Services Gal. She’s a terrorist of some kind I think. It’s not her fault and she can’t do a thing for me – but she has the attitude like “I’m in control here.” There’s a $500 fee to cancel the merchant services agreement, or $100/yr fee to keep it and not use it. Well $100 won’t break the bank, but the principle here is important. I really want to cancel at this point – and I want the fee waved. So what do I do.

Practice This – Negotiation and Moving Up.

I’ve done this many times – when I do it without making a mistake, I usually win. But in this case, it looks like it might be a hard one. The jury is still out – but here’s where we are.

1. The first woman on the line, whose name I forget, just kept repeating the policy. My first mistake was not writing down her name. You always want to know who said what along the way. About 10 minutes into this volley, I remembered to ask her if she had the authority to wave the fee. She did not. As soon as I asked that question it was easy. I apologized for wasting her time and asked for her supervisor. There’s no reason to continue talking to her.

2. Bonnie was next on the line. She is the Account Specialist over there at Bank of America Merchant Services. I was told by the first woman that if anyone could wave the fee, it would be Bonnie. I tried to review the case with her, but she quickly said she could not wave the fee but could discount it by 50%. That might be okay for some, but I don’t consider it a win. After all, my contract ends in two years so why not just pay the $99 annual fee for two years and be done with it. This time, rather than debating the issue, I simply asked her for her supervisor.

3. After about 10 minutes, Jessie, the supervisor was on the line. She also offered the $250, but didn’t seem to understand my problem. Since Merchant Services is not actually Bank of America, they don’t have to cooperate. It’s really BOA’s fault, but only Merchant Services can release me from the contract. At this point I clarified with her – “Do you have the authority to wave this fee.” She simply said no. At this point I simply apologized for wasting her time and asked for her supervisor…Dale.

4. I am now waiting for Dale to call back…it’s a 24 to 48 hour process….Talk about real time customer service. I’m sure Dale is busy since no one in the lower ranks is able to do anything.

At this point I put another call into the bank to explain this whole mess – to see if they can apply some pressure from there side. They promised to work on it and get back to me by close of business.

There are a couple of things to learn from this mess.

– First, I am still wondering if the “Policy” is written down somewhere. How is it that the bank made this mistake and seemed to not charge me for months, and then suddenly the change…still need to get to the bottom of that one.

– Arguing with customer service reps who are not empowered is a waste of time…but think how much it is costing this organization to escalate these issues up the ladder. Companies really should empower people to make a decision. Maybe not the first level – she should have offered the 50% deal. But I am 4 levels up now…Even US Airways was easier to deal with when I had a seat issue a few years back.

– Use these opportunities to build your endurance, make a good case, not get angry, and be willing to keep going higher. It’s great practice.

I’ll let you know what happens…in the mean time, I am not processing credit cards through Bank of America Merchant Services. I have two other providers who are both easier to deal with. If you have an opportunity to choose Bank of American Merchant Services, think again. There’s someone out there who is more customer friendly than they are.

Move to the 95% Close Rate

In my independent, unscientific, but somewhat accurate assessments – sales people in the high-tech industry are closing about 20% of their proposals…how frustrating. The time from initial call to proposal could be measured in months, many trips across town – or even long distance travel. And then there’s the writing. By the time you get to proposing, you really want to close.

One Secret Stands Above the Rest…

Well, actually there are many factors, and nothing is guaranteed. But there are some steps and then there is one major secret that I’ve found – that will make the big leap from hoping to confident. Here are a few tips:

The deal is sold long before the proposal is written in my opinion. If you’re writing, thinking to yourself, this might not close…big mistake. Insist on talking to the people making the decision before going through all of that work.

Meeting with what I call “Asset Owners” is a critical step in the process these days. IT may have the technology info you need, but asset owners – a term I use and define extensively in my book, The House & the Cloud, is key. These people live on the business side of the business…they oversee Money Making aspects of the company. Profit Centers. And according to Harvard Business Review, carry a lot of weight in the big decisions being made. They bring a whole new meaning to the term – Influencer.

When you finally do write – write it to the person doing the approving. I like to do this more like a letter or memo, and less like a proposal…

Now, what is the one giant secret that really does make all of this work…that’s the topic of my upcoming web training. You can access it for FREE on Feb 10th at 3:00 PM ET. Here’s the link to read how: (READ MORE).

Be sure to follow the instructions – seating is limited and I don’t want you to miss this one…

I’ve written numerous posts on negotiating, and as I continue to study this area, it gets better all the time. Over and over I have encouraged people to practice! Use every customer satisfaction issue as an opportunity to work through difficult situations! Become an expert at staying cool, controlling the situation, and methodically moving through the process.

Yesterday I experienced another victory – I received a call several weeks ago from a telemarketer asking me to switch from Windstream to Time Warner Cable for phone and Internet. The cost was about half of what I was paying (I think I actually wrote about this sale a few weeks ago – the agent did a great job selling me), so I bought it! Well this was the week to cut over. I am now running my office on digital cable phone for half the price…however, vmail was not included. The sales agent assured me it was, but alas it is not.

So yesterday I decided to see how high I would need to go to have free vmail. I started with the call center who predictably could not give me free vmail. Agreeing that this would be impossible, I asked to speak to the supervisor – Wyatt soon joined me, and we reviewed the situation. He was sure is could not be done, so I simply restated, “You are not able to do this”. He agreed, and I asked for his manager John. John was very helpful, however he was not able to do it either. However, John truly did want to help me, and began reviewing some options. Finally he came back and asked me to visit the local store. Well, who has time to drive to a store in the middle of a work week? So I asked for the store phone number instead, which he gave me. From there I called the store, asking for the supervisor.

The person who answered the phone insisted on helping me before getting a supervisor involved, however, he also could not help me once I explained my dilemma. Finally, I was escalated to the store manager Brett. Within a few minutes Brett was checking to see what he might offer me. I recommended a half year of free vmail, to which he agreed, and then proceeded to add it. Perhaps I could have pushed for more, but I was happy with the response. Time Warner Gets an A+ for customer service on this one (although I would recommend empowering some power down the line to shorten this up a bit). Once again, it pays to work through the process rather than getting upset or giving up. Give it a try.

I have written several posts on negotiating with customer service and sales people as a way of practicing. You can do this almost every day at home as telemarketers prey on you and your family. It makes getting unexpected calls more interesting. In a recent webinar on fee setting (which is also discussed in my new book, From Vendor to Adviser – #VendortoAdviser), I talk about the need to understand the value, and get to the point where your client really understands, before quoting price. This same principle is key to the negotiating process as demonstrated on a call I had yesterday with Time Warner. Here is what happened…

I received an unexpected call from a telemarketer selling phone, cable, and Internet packages. He started by asking me what I do for Internet connectivity, then went to cost – how much does it cost me. Keep in mind, this is not a return on investment sale, but rather a classic TCO (Total Cost of Ownership) sale. When I told him, he said, “Wow, that’s high”. His comment was not scripted which made me feel like he was actually listening to me. This one principle kept me on the line in the midst of a busy day!

He then asked about phone and TV. I don’t watch TV, so he went right to the phone/Internet bundle and started talking prices while mentioning faster speeds. He did not try to argue DSL speed vs. Cable, which I have heard one too many times. I wasn’t complaining about speed – just price. So as long as the speed is comparable, the price is all I care about. So where does the negotiation come in? As soon as we started talking quote…

Once we came to the real numbers it came out that there is an installation charge of almost $100 between my two phones, fax, and Internet service. Knowing that annuity revenue far outweighs the installation charges, I asked told, “I’m good to go if we can wave the fees”. “Can’t do that,” he said, the people who come on site have to be paid. But we all know that the money I pay for installation is not going directly to the installer, and there is no way the managers of that group are going to give up two phones and an Internet for $100. I’ll be paying $100 every month from now until I die, unless a cheaper solution comes along next year, so I said, “I guarantee your manager will wave the fee to do this deal, go ask him.” He was skeptical, but willing to go to bat for me. Within 60 seconds we had a deal, free installation, and half my current bill, without a long term commitment! It pays to learn what matters most when negotiating.

One more thing: Don’t miss our Vendor to Adviser Webinar coming up December 21st – you can check to see if there are still seats open at: (CLICK HERE) – if not, get on the Waiting List!

I prepared 7 well kept secrets to help you change your pricing models for 2012 – and I know they will help you increase profits if you follow them closely. Let me hint at one important pricing concept right here to get us started…

Did you know that when you discount 20% on services, you give away 40%? It might be obvious, but tomorrow I plan to show you several simple math problems that will explain where most resellers lose money over the course of a year, and how that affects not only the bottom line, but every sales person’s personal income (and eventually your company’s ability to deliver quality service to the customer!). I’ll show you how, and what to do about it tomorrow at 1 PM, ET. Make sure you put this on your schedule – one hour could change your entire financial outlook for 2012…

Two areas I see even some of the most successful sales people missing on are fees and proposals.

Fees are tricky – sometimes your company sets this for you, but if you have any control over this, it’s one of the places you must master. Too much, and the client looks at you like you’re a thief, too little and you leave money on the table or worse, discredit your own value. I often hear the comment, “When we fix price, we lose money.” Wow, that tells me you haven’t learned to estimate, but I will show you the secret of pricing on December 9th…there are two ways to calculate fixed price fees, then there are block time sales (which may be the thing that keeps you from really profiting the way you should be – and I’ll show you exactly why that is.) And of course T&M, but there are two ways to do T&M, and one of them results in you taking all the risk. I cover this in detail in my new book, From Vendor to Adviser, along with calculations and examples, so I won’t go into it here…but this is critical stuff!

Then there is the proposal…I see many making one of several mistakes. They execute the sales process perfectly, and then get to the proposal, and…well, all that effort turns into a big negotiation process, and maybe a visit to the chief purchasing officer (who, no doubt, has a degree in Negotiation Strategies!) Who needs that at the end of a long sales cycle, and especially here at year end? One thing I can tell you, the meeting you have right before you write this proposal is the key to success – but there are at least eight secrets I give in my book to make this go much more smoothly. I don’t know about you, but I don’t really like writing proposals – especially when they don’t close!

Here is that link again – I’ll see you on the 8th and hopefully on the 21st for the second one. There is no cost to you, other than time, so don’t miss this.

Pareto’s Principle – the 80/20 rule, applies in so many situations; negotiations included. Listen 80 percent of the time, talk the other 20. Great negotiation has a lot to do with a person’s ability to discern the hidden truths of what is being discussed, debated, or negotiated.

While the purchasing officer may be a well trained negotiator, most managers that pressure you to discount, are not. Learn to ask great questions that will lead your opponent to talking. Reflecting back what you’ve heard is often effective in getting them to continue talking. The more they talk, the more likely they are to show their cards.

Start with those you are working with – the implementers. Investigate, discover, and analyze. Long before you get to the negotiation table, you should know their timelines, the urgency of their project or initiative, alternatives they’ve considered, and even some of the other firms who have been considered.

Know why they chose you – you should have a verbal before writing your proposal if you’re following earlier advice I have given.

Learn who else was considered for this project and why they might not have been selected.

Ask, who besides yourself will be involved in the decision making process. By asking this way, you avoid pointing out that your listener may not be the actual buyer.

Know what business processes will be affected by this initiative, and what impact the final solution will have on the business.

By understanding these things, you stand a much better chance of closing this business without caving in on price.